Running your embroidery shop requires considering your expenses and matching the prevailing industry pricing for stitch work. Multiple factors determine the approval or rejection of a quotation.

The simplest way to price your embroidery work is stitch count. If you are a newbie, you can start charging 50 cents per 1000 stitches and increase as high as $4 depending upon the design's size. Moreover, you can also add other design attributes such as the number of colors, stitch length, order quantity, etc., and adjust the pricing accordingly.

Or, you can set hourly pricing. That is to say, you charge as per the number of hours you spent on the stitching work of the garment. This pricing constitutes the overhead expenses in embroidery and your profits.

If you have a home-based embroidery business, the most significant thing is --- your overhead costs are too low. You do not have to pay rent or other monthly dues. You can easily set competitive pricing(slightly lesser than others). Thus, attracting more customers and increasing profitability.

Best Ways to Price your Embroidery Work:

Let us discuss the best ways to price your embroidery work easily.

01. How to Calculate Your Embroidery Cost?

Embroidery Cost depends on so many factors. The thumb rule is you convert into stitches and calculate the number of stitches. What are embroidery stitches, you ask? An embroidery stitch is considered when the needle penetrates once into the material. The finished design is produced in a file called the "tape." The tape file will tell the embroidery machine where and how many times the needle had to go into the material to get the image.

The standard industry practice for embroidery pricing is of two types, i.e., ‘Pre stitch pricing’ and ‘fixed unit pricing.’

01. Per Stitch Pricing:

Most of the time and embroidery will price its work based on each stitch. He will breach the tape into the cost per every 1,000 stitches. The cost is typically set depending on the quantity or orders.

Example:

• Order - 50 caps
• Tape - 9,500 stitches
• Per 1000 stitch rate -$1 per thousand stitches.
• Per product cost - 9,500/1,000 = 9.5 X $1 = $9.5/product
• Product cost for 50 caps = $9.5 X 50 = $475

02. Using Embroidery Design Tool:

Suppose you are having an online store or an offline local store. You want your customers to design products and place order. The online design tool helps you in two ways:

-Provide a design studio for your customers to design products from your online storefront or offline kiosk app.

-Automatically calculates the final embroidery price as per the stitch count(based on your base price) and digitization cost(if you are offering embroidery digitizing service).

03. Fixed Unit Pricing:

Fixed pricing is set per “tape” design irrespective of the number of embroidery stitches. Depending on the embroidery designs, it could be both cost-effective and expensive for embroiders.

On the other hand, customers get lured into this, and the embroiders would print a design with fewer stitches to save money, thereby giving it an incomplete appearance.

Running an embroidery shop is not easy and not cheap. It does manage to put some panic and fear into the hearts of small business owners. For the most part, business owners fail to price their services right for the following problems.

• Do I charge too much so my customers will go to my competitors?
• If I don’t charge enough, I will lose my business.
• There’s too much competition in the embroidery market, so I should charge less.
• It isn’t very comfortable to ask for more money.
• I am confused because I don’t have much experience in the industry.

Apart from the reasons mentioned above, other factors make product pricing difficult and could give you anxiety. However, if you follow a simple set of rules and do some simple math, you should be able to price your embroidery work right.

04. Embroidery Pricing Method (Doing the Math):

The top things that go into determining your cost are:

• The actual cost of embroidery
• Profit margin
• The perceived value of the product
• Competitor’s pricing
• Selling price

First off, add up all your business expenses, especially the supply costs such as rent, equipment cost or equipment lease, labor cost, insurance, compensations, raw material, office supplies, phone, postage, etc. Next, you divide the total cost by the number of hours of the time period. E.g.

Embroidery Pricing Chart:

1. Per day work hours - 8 hrs
2. Workdays per week - 5 days
3. Number of weeks a year - 52 weeks
4. Total hours for 1 year - 8 x 5 x 52 = 2080 hours

05. How to price embroidery work?

Now add up all your expenses as mentioned above; for example, your total cost per year becomes $43,000. Then divide the total cost by the number of hours, which is $20.67 per hour. Now you have turned this figure into the price per unit. For embroidery, the best choice of unit is stitch count. For example, your machine can produce from 20,000 to 30,000 stitches per hour, which means for 20,000 to 30,000, it costs $20.67; so, for 1000 stitches, it cost between $0.68 to $1.03. Now, this should be your standard pricing per 1000 stitches.

Next, you have to add your profit margin per 1000 stitches. If you want the profit margin per year to be $70,000, then when you divide it by the total number of hours, you get $33.65. It is the profit margin per hour. For 1000 stitches, it will cost between $1.12 to $1.68.

If you do the math, your selling price per 1000 stitches should be nearly $1.8 to $2.7. So, for a product with 7000 stitches, the selling price should be $12.6 to $18.9. It is the cost per product. For a 1000 product order, the selling price should be $12,600 to $18,900.

A snapshot of our previous calculation:

1. Total hours per year - 2080 hours
2. Total yearly expense - $43,000
3. Expense per hour - $20.67
4. Number of stitches produced in an hour - 30,000
5. Per 1000 stitch cost - $0.68
6. Perceived profit margin per year - $70,000
7. Profit margin per hour - $33.65
8. Perceived profit margin per 1000 stitches - $1.12
9. Final selling price per 1000 stitches - $1.8
10. Number of stitches in a product - 7000
11. Cost per product - $12.6
12. Cost for 1000 products - $12,600

06. Apart From Hourly Pricing, what other pricing models do we have?

6.1. Cost-plus pricing model:

Cost-plus pricing model means it is counts the total cost. It includes labor, materials and overheads.

Moreover, it covers all the your business expenses and still you can make a profit. For example, if your material costs and labor cost is $15. You can add a 20% margin as a profit. Therefore, you can set your selling or product price at $18.

6.2. Market-based Pricing:

Market-based pricing means you set your pricing based on analyzing your competitors' prices and adjusting your rates to stay equally competitive and profitable.

Let us learn this with an example:

Suppose you run an embroidery business and are considering pricing a 5,000-stitch design.

After checking competitor prices in your area, you find that similar embroidery services for a design of this size are priced around $15 to $25. This is called market range.

Now, let us calculate your total expenses.

• Material Costs (fabric, thread): $5
• Labor Costs (time taken for the job): $10
• Overheads (machine maintenance, electricity, rent): $3

Total cost = $5 (materials) + $10 (labor) + $3 (overheads) = $18

Determine your price range and analyze:

You don’t have to match the competitor’s prices exactly, but you should stay within the market range of $15 to $25. Given your total costs of $18, you have a few options:

• Moderate profit
• Premium pricing

If you want to make a moderate profit, pricing at $20 would give you a profit margin of $2.

If your embroidery quality is exceptional or you offer additional services (like faster turnaround times or custom designs), you could price at $22 or $25, aiming for a larger profit margin.

Hence, you can find balanced rates for your embroidery service that stays you competitive and profitable. But avoid overpricing if your starting out or have been into this product decoration business for sometime.

07. Embroidery is a different type of printing process:

As you know Embroidery is a different type of printing process. Unlike screen printing, the automatic press can’t print 400 shirts an hour. It is somewhat slower and demands some time to set up and give attention to details.

Moreover, it’s not easy to provide high price breaks for large volume embroidery prints.

08. Each Embroidery Job is Different:

You may price your job based on the number of embroidery stitches, but you should also consider other complexities, such as the number of times machines have to stop to cut embroidery thread and change thread color. You will have to trim a lot of threads after it’s done.

Moreover, some jobs such as embroidering a hat would be difficult compared to shirts, bags, and jackets. There’s no way to calculate these prices. Therefore, it has to be determined by you.

How much does embroidery cost per letter?

Generally, the cost of embroidery per letter ranges between $1 to $2. However, it varies from location and the embroidery business.

For example, many embroidery shops charge around 50 cents to $1 per letter, while others might set a flat rate for names or phrases, often starting at $3 for short names. As per eHow, some shops have a setup fee of $5 to $8.

For a practical example: if you wanted to embroider a 5-letter name on a T-shirt, you might charge between $5 to $10 for just the embroidery, excluding the cost of the item itself. This would typically be calculated at $1 to $2 per letter, with an added setup fee.

Moreover, if the design is complex, you may charge higher. If the order quantity is large, you may need to decrease per item cost to attract potential customers.

Conclusion:

Embroidery is rather expensive both to create and to purchase. Many high-fashion brands still use embroidery for their brand logo. Embroidery is perceived as higher value and more professional than other printing processes such as DTG or Screen Printing.

When you decide to price your embroidery work, make sure you are making enough profit because otherwise, you could be losing your business if your products are not priced right. Just for your knowledge if you want to find an embroidery locally, just search one google "embroidery near me". It will show you the list of embroidery shops in your location.